Indian agrochemicals industry to see 6-8 per cent growth in FY27: CareEdge Ratings

The Indian agrochemicals industry (excluding fertilisers) is expected to witness stable growth of approximately 6-8 per cent in FY27, supported by steady domestic demand, improving crop intensity, and expanding distribution reach, according to a report by CareEdge Ratings.

The Indian agrochemicals sector continues to benefit from strong underlying agricultural fundamentals, with domestic demand providing a stable base for sustained growth. Despite global volatility, India remains a structurally growing market, supported by increasing agricultural activity and improving farm economics, the report explains.

It stated that agrochemical demand in India continues to be supported by structural drivers. Cultivated area increased to about 29.5 million hectares in FY25. At the same time, food grain production rose to around 369 million tonnes, reflecting higher cropping intensity and a growing need for crop protection inputs.

In addition, policy support and expansion in distribution networks remain key enablers, with the number of pesticide sale points increasing steadily to over 3 lakhs by FY25, thereby improving last-mile accessibility and supporting deeper market penetration.

The report pointed out that India continues to maintain a strong position in global agrochemical exports. Export volumes have expanded to nearly 0.7 million tonnes in FY25, reflecting sustained global reliance on Indian manufacturers.

“In FY26, export volumes stabilised, supported by steady demand in the United States and gradual recovery in select European and LATAM markets, even as some regions continued to adjust from previously elevated inventory levels,” as per the report.

It further highlighted that entering FY27, export growth is expected to remain gradual and largely volume-led, supported by normalised channel inventories, stable global demand, and improving traction in key export regions.

However, pricing pressures are likely to persist amid continued global oversupply. The export mix reflects a balance between scale and value. Fungicides contribute significantly to volumes, supporting capacity utilisation, while herbicides and insecticides generate relatively higher value per unit, the report outlines.

This balanced product mix supports operating efficiency and earnings stability, particularly during periods of pricing pressure, it added.